Tag Archives: Unemployment

Low unemployment isn’t worth much if the jobs barely pay

By Martha Ross and Nicole Bateman – Each month, the Bureau of Labor Statistics releases its Employment Situation report (better known as the “jobs report”) to outline latest state of the nation’s economy. And with it, of late, have been plenty of positive headlines—with unemployment hovering around 3.5%, a decade of job growth, and recent upticks in wages, the report’s numbers have mostly been good news.

But those numbers don’t tell the whole story. Are these jobs any good? How much do they pay? Do workers make enough to live on?

Here, the story is less rosy.

In a recent analysis, we found that 53 million workers ages 18 to 64—or 44% of all workers—earn barely enough to live on. Their median earnings are $10.22 per hour, and about $18,000 per year. These low-wage workers are concentrated in a relatively small number of occupations, including retail sales, cooks, food and beverage servers, janitors and housekeepers, personal care and service workers (such as child care workers and patient care assistants), and various administrative positions. more>

Young, educated and jobless

By Karola Klatt – In the wake of the financial and economic crisis, youth unemployment has skyrocketed in almost all industrialised countries, especially in southern Europe. When the impact on the labour market peaked in Italy in 2014, 42.7 percent of 14-25-year-old job-seekers were without work. In Spain, the figure was as high as 55.5 percent in 2013, while it stood at 58.3 percent in Greece in the same year.

Failing to secure a job means young adults face a hurdle right at the start of their independent lives. They remain reliant on their parents, boosting feelings of exclusion and helplessness.

It is a political as well as economic challenge, as those lacking prospects often veer towards extremist and populist movements. Anti-democratic attitudes commonly emerge from a context of personal crises: a sense of being socially excluded and an inability to improve one’s lot often triggers a rejection of the ruling system.

Switzerland, Norway and Germany have however not witnessed a dramatic increase in youth unemployment in the aftermath of the crisis. One reason for this, according to experts, is the success of the dual training system which is particularly important in Germany, Austria and Switzerland.

In Germany, young people and young adults gain hands-on experience of their future professions in companies, while completing the theoretical part of their training in vocational schools. Ideally, trainees should be taken on by the training company after their apprenticeship. Where this is not possible, they can use the experience gained during their apprenticeship to apply to other companies, thus easing their transition to working life. more>

Will robots make job training (and workers) obsolete?

By Harry J. Holzer – Automation eliminates the number of workers needed per unit of good or service produced. By reducing unit costs it raises productivity and, in a competitive market, product prices should decline. All else equal, this will raise consumer demand for the good or service in question.

Whether or not this rise in product demand is sufficiently large to raise overall employment for the product depends on whether the fall in workers needed per unit of production is proportionately lesser or greater than the rise in the numbers of units demanded; if lesser, than product demand will rise.

Labor economists believe that workers mostly pay for general skill development (often in the form of lower wages, when the training occurs on the job), while employers are willing to share more in the costs of developing worker skills more specific to their needs.6 A shift away from specific towards more general skill training will thus involve a shift of the costs of training away from employers towards workers (or the public), and less sharing of any risks involved in whether the market rewards those skills over time.

Some workers whose tasks can mostly be performed by machines will be displaced, while demand is enhanced for others who can work along with the new machines—perhaps as technicians or engineers but also in a range of newer tasks that the machines cannot perform, including more complex analysis or social interactions with customers and coworkers. more> https://goo.gl/pveH2W

A Magic Wand for France?

By Anders Åslund – In the early days of his presidency, the French public is behind him; recent polling puts his approval rating at 62%. Yet goodwill can dissipate quickly, which is why Emmanuel Macron must move to capitalize on his early mandate by implementing reforms of fiscal policy, taxation, the labor market, and education, to name but a few areas where change is long overdue.

France’s most immediate problems are anemic growth and inadequate job creation. For the last 12 years, France’s GDP has increased by barely 1% a year, less than the mediocre uptick in the European Union as a whole, while unemployment currently hovers just above 10%.

Only five EU countries – Croatia, Italy, Cyprus, Spain, and Greece – have higher unemployment rates.

Part of the unemployment challenge is tied to hidden costs. France has some of the highest labor costs for hourly employees in the EU, and a natural consequence is tepid hiring. With inequality also growing, many French are rightly upset that labor is taxed much more than capital gains. Indeed, France’s payroll taxes amount to 19% of GDP – far exceeding the EU average of 13%.

Likewise, government spending, at 57% of GDP – is the highest in the EU, where the average is 47%. This burden is excessive, and significantly hinders economic growth. more> https://goo.gl/jxchXt

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If Robots and AI Steal Our Jobs, a Universal Basic Income Could Help

By Peter Diamandis – Some fear that robots and AI will steal our jobs.

They probably will (in the near-term, at least half of them).

If that happens, what will we do for a living? How will we earn money?

In 2013, Dr. Carl Benedikt Frey of the Oxford Martin School estimated that 47 percent of jobs in the US are “at risk” of being automated in the next 20 years.

The concept is called technological unemployment, and most careers, from factory workers and farmers to doctors and lawyers, are likely to be impacted. The impact will likely be even more severe in the developing world.

The expected implications of technological unemployment vary widely.

Can governments react quickly enough, given the pace of innovation and automation in tech? Is it actually a solution to technological unemployment? Or will we still have to go through a turbulent, violent period as we redistribute our labor in a world of robots and AI? more> https://goo.gl/hzsrqE

Why Fed Has Failed to Lower U.S. Unemployment

By A. Gary Shilling – The Fed’s program to spark job-creation is a five-step process that is supposed to work like this: First, the central bank buys Treasuries or mortgage-related securities. Second, the sellers reinvest the proceeds in stocks, commodities, real estate and other assets, pushing up prices. Third, higher asset prices have a wealth effect by making their owners feel richer. Fourth, consumers and businesses spend on goods and services and capital equipment. Fifth, that spending spurs production and demand for labor.

Nevertheless, the Fed‘s efforts haven’t worked very efficiently when it comes to the last three steps. more> http://tinyurl.com/mpzmmgj

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There Are 4 Million U.S. Job Openings: Why Are The Positions Unfilled?

By Adam Lewis – You may not know that there are actually four million open jobs waiting to be filled, and that American businesses could be filling more of those jobs – if they better utilized technology.

When it comes to this mismatch between unemployment numbers and vacant jobs, blame is cast in all directions: Job seekers are unwilling to move cities or work in unfamiliar positions; Employers are holding out for the elusive “perfect candidate”; and schools just aren’t providing the right skills.

To better understand this, I recently put myself through the job application process as a walk-in candidate with a few well-known global brands in New York City. more> http://tinyurl.com/mq55std

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High long-term joblessness not here to stay: Fed study

The Federal Reserve Bank of San Francisco at 1...

The Federal Reserve Bank of San Francisco at 101 Market Street. (Photo credit: Wikipedia)

By Ann Saphir – Since the end of the Great Recession, U.S. unemployment has remained elevated, measuring 7.9 percent in January.

Research published in the latest San Francisco Federal Reserve Bank Economic Letter by research advisor Rob Valletta debunks that view with an analysis of job-finding rates.

“Importantly, that finding implies that the current elevated level of long-term unemployment is likely to disappear over time,” Valletta wrote. more> http://tinyurl.com/b2dz8l2

Euro Crisis Seen Reaping Social Toll With Record Jobless

By Scott Hamilton – Unemployment in the 17-nation bloc climbed for a fifth month to 11.9 percent, according to the median of 34 economists‘s forecasts in a Bloomberg News survey. That result due on Feb. 1 would show the highest jobless rate since records began in 1995. By contrast, German unemployment data the day before may show the jobless rate there held steady for a fourth month at 6.9 percent in January, a separate survey found.

“The worst may be over for financial markets, but definitely not for the real economy,” Marco Valli, chief euro- area economist at UniCredit Global Research in Milan. more> http://tinyurl.com/a4txckx

Housing, labor data provide upbeat signs on economy

By Lucia Mutikani – The number of Americans filing new claims for unemployment benefits tumbled to a five-year low last week, a hopeful sign for the sluggish labor market.

“This is a good sign for the January nonfarm payrolls,” said David Sloan, an economist at 4CAST in New York.

While last week’s decline ended four straight weeks of increases, it may not signal a material shift in labor market conditions as claims tend to be very volatile around this time of the year. more> http://tinyurl.com/b5374nu